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2017-07-14 16:35:31

MOC

Command Security

$3.29

-0.01 (-0.30%)

16:35

07/14/17

07/14

16:35

07/14/17

16:35

Command Security terminates relationship with major transportation company

Command Security announced that beginning on September 1, it will no longer provide security services in the northeastern U.S. for a major transportation company. The Company has performed services for this Customer for the past eight years. During recent pricing negotiations, as part of the Company's efforts to seek recovery of additional costs arising from tightening labor markets and increased minimum wage rates, the Company advised the Customer that it was no longer economically feasible for the Company to continue the work under the Customer's proposed pricing as well as certain other proposed terms. Rather than accept the extension of the agreement on terms that were not economically feasible, we asked the Customer to put the work up for bid and, accordingly, the Company notified this Customer on May 18 of the Company's intent to terminate the existing agreements and cease work on August 31. The Customer subsequently notified the Company on May 26 of its decision to terminate the agreement and invited the Company to participate in the Request for Proposal that followed. During the RFP process which commenced on June 2, the Company and other bidders were advised that any bidder currently performing similar services for certain competitors of the Customer, which includes a customer of the Company, would be disqualified as a bidder in the RFP process. While unfortunate, the loss of this Customer is not expected to have a material adverse effect on the Company's results of operations or overall financial position. Based on the three-months ended June 2017, total annual revenues related to this Customer are approximately $21M. The Company intends to modify certain operational activities and implement appropriate cost reductions in response to this reduction in revenues. The Company is grateful for the commitment and hard work of its employees over the many years we provided services to this Customer. The Company understands that changes like this present challenges to the affected employees and the Company is committed to effectively communicate with all our employees through this process as new information becomes available.